By Jason Roth
Keep Up with Licensing Automation i
senior vice president
A convergence of tech and regulatory forces might mean procedural changes
Navigating the mortgage indus- try’s regulatory landscape, with its fluctuating volume and rapidly changing loan programs, presents
an ongoing challenge for mortgage
originators and regulators. Technology
In some cases, originators must
adopt new approaches if they want to
continue in the business. This is especially true when it comes to licensing.
The Secure and Fair Enforcement
for Mortgage Licensing (S. A.F.E.) Act’s
minimum licensing procedures include,
among other things, the adoption of the
Nationwide Mortgage Licensing System
(NMLS) as a centralized online registry
for mortgage originators. This means
when it comes to licensing, the use of
technology isn’t merely encouraged —
After the S. A.F.E. Act’s implementation, states scrambled to enact
compatible licensing laws. As of mid-
2009, 47 states had passed legislation
multiple states. Originator applicants
could go to a single place to apply for
approval to originate loans. This creates
a uniform application process and can
enable states to share valuable informa-
tion about bad actors.
The system, eventually dubbed the
NMLS, and a uniform set of application
forms and procedures are available to
any CSBS or AARMR member agency
that wishes to adopt the new way of
managing licensing and registration.
Depending on where you do busi-
ness, you may have noticed that several
states decided to adopt the uniform sys-
tem and application procedures in early
2008. That might have ended the story,
if not for Congress’ intervention.
In July 2008, Congress enacted the
S. A.F.E. Act. This established a minimum set of originator-licensing and
-registration procedures that state lending and banking regulators must meet.
If a state fails to meet the minimum standards in a set time period, HUD can step
in and manage the originator licensing
and registration process instead.
implementing procedures to comply
with the federal minimum standards
set forth in the act.
In turn, the S. A.F.E. Act’s provisions
accelerated adoption of technology
that might other wise have taken a long
time to make its way through state
agencies and regulatory authorities.
As technology’s influence continues
to grow, brokers should understand
what brought us to this point. They
also should look for ways to use new
tools to their advantage.
On the Web h
How change happened
If you originate mortgages under a state
license, you can bet the agency that
regulates your lending operation is a
member of the Conference of State Bank
Supervisors (CSBS) or the American Association of Residential Mortgage Regulators (AARMR).
These two organizations created a
centralized online system for tracking
licensing for mortgage lending across
Nationwide Mortgage •
Licensing System Resource
Conference of State Bank •
Supervisors (CSBS) and
American Association of
Residential Mortgage Regulators (AARMR) Multistate
Mortgage Committee Report
to State Regulators: sctsm.
CSBS and AARMR Model •
licensing. It should be easier to keep
track of your licenses, and less paper-
work should be required to expand to
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A new dynamic
The NMLS is a tool for regulators. In addition, consumers can research contact
information for state-licensed individuals and companies and licensing status
help. We are the bank. We are the decision maker.
help you and your company close more loans.
ess your loan.
os at We ApproveLoans.com L a s o or call 877-353-2233 .
“Stay on top of
the latest t
understand how it will
affect your business.”
Jason Roth is co-founder and senior vice
president of ComplianceEase. He oversees
the company’s mortgage compliance and
risk-management products, including
ComplianceAnalyzer, which audits loans for
compliance and helps state regulators automate their examination process. Roth has a
bachelor’s degree from the California Institute of Technology (Caltech). His previous
work includes positions at Adobe Systems
Inc. developing Acrobat and PDF technology.
For more information, e-mail Roth at j.roth@
complianceease.com or visit his company’s
Web site at www.complianceease.com.